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Gold/Mining/Energy : Precious and Base Metal Investing
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To: rubbersoul who wrote (33719)1/5/2005 3:56:41 AM
From: Taikun  Read Replies (1) of 39344
 
jhong,

Managers are starting the year with tons of cash. You could see that was going to happen in Dec because the markets were overbought and managers don't want to take new positions at these levels. At the same time 2005 retirement contributions are arriving in droves. This year, unlike last, managers can park cash in GLD, and there have been quite a few articles on managers parking spare cash in GLD. So this is a short cash-long GLD position as opposed to an investment in GLD. This is short-term money.

Therefore one needs to be careful about coming to these conclusions, because once that manager decides to invest in something more attractive, the sell GLD. In the past, investing in physical gold was a more permanent position. Instead of GLD competing against cash for a position in a portfolio, GLD IS cash in a portfolio, and GLD competes with equities and fixed income, and at the margin this could depress GLD depending on market dynamics.

D
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